Affordable homes not meant for profit

It has been five years since the first affordable housing units went on sale in Shenzhen. Now, some affordable home owners in the city are looking to sell, and they're calling on the local government to wave sales taxes on the appreciated value of their properties.

Unfortunately, such demands not only violate the terms of the original sales contracts, they could turn China's affordable housing scheme into a money-making tool.

Affordable homes are social goods meant to benefit low-income families. To prevent their abuse, two points deserve attention. First, affordable housing units should not go to families that are not categorized as low-income. Second, potential profit-making opportunities involving these homes should be suppressed.

Over recent years, municipal authorities in Shenzhen have done a commendable job controlling the distribution of affordable homes. Prospective buyers who are caught presenting falsified qualification material could face fines of as much as 100,000 yuan ($16,108). Furthermore, local housing officials had previously submitted a proposal, as mentioned above, that would tax an affordable home's increased value. On top of this tax, government buyback initiatives could also serve as a strategy to control prices.